WASHINGTON — Retail apparel prices rose a seasonally adjusted 0.8 percent in January, as retailers regained some pricing power after the holidays, the U.S. Labor Department’s Consumer Price Index showed Thursday.
Women’s apparel prices were up 0.9 percent, with all the categories increasing except suits and separates, which fell 0.4 percent. Prices for dresses gained 2.5 percent last month, while prices for the combined underwear, nightwear, sportswear and accessories category rose 1.3 percent and prices for outerwear were 0.8 percent higher. Girl’s apparel prices rose 3.7 percent last month.
Men’s apparel prices increased 1.9 percent. Prices for the combined suits, sport coats and outerwear category increased 4.6 percent, while prices for pants and shorts gained 2.7 percent and prices for shirts and sweaters rose 1.4 percent. Boy’s apparel prices fell 2.6 percent last month.
Jeet Dutta, senior economist at Moody’s Analytics, said for retailers to truly gain pricing power they would need sustained consumer demand and he noted “we haven’t seen that yet.”
“At the start of this year, consumers were facing some headwinds because of the payroll tax holiday that expired, which means higher taxes, and on a seasonally adjusted basis gas prices have risen, so consumers are dealing with those things,” Dutta said. “We are expecting consumers to be subdued in the first few months of the year. It is unlikely that retailers are going to have that much pricing power in the face of subdued consumer demand.”
Dutta said apparel retail sales were up modestly, attributing it partially to consumers’ willingness to cut back on savings to maintain spending.
The overall CPI was flat in January. Core prices, excluding the volatile food and energy sector, rose 0.3 percent.
“The 0.3 percent increase in the core CPI was the largest since May 2011,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “Among the big contributors were apparel (up 0.8 percent), airfares (up 1.1 percent), and lodging away from home (up 1.2 percent). It would be premature to raise any alarms, though. Over the last 12 months, core prices are up only 1.9 percent. A year ago, that rate was 2.3 percent. Demand pressure isn’t strong enough to produce an inflation problem.”